Trade Examples

January 11 2014 Update

Spec-k executed superbly through 2013. The rate of return for the calendar year was 22.1% on my trading account (no back testing here, just actually traded results!). You can see my “life history” equity curve for this trading account immediately below. It has generated a 42.1% return over 19 months, which is an average annualized rate of return of 24.7%. The equity curve below is plotted on a monthly basis so there is some smoothing:

results graph 140111

August 6 2013 Update

July 2013 has generated the best Spec-K trading results to date over 14 months of “big money” trading. I increased my trading account equity by a whopping 7.5%…in one month! Annualized that measures out to 137% per year! Realistically I know this won’t continue, but it certainly is super-charged short term performance! It demonstrates the power of the Spec-K system. Over July I closed a total of 31 trades, with 30 as winners and only one loser. That loser arrived only after 28 straight winning trades extending back to late June. The average per trade profit across all July closing trades was 2.5%, and the average length of time the closed trades were “on” was a mere 6 trading days. Here’s the resulting 14 month equity curve of my Spec-K trading account:

results graph 130801

Jun 1 2013 Update

My one year mark of trading Spec-K consistently on “big money” is complete, and the bottom line profit: 24% equity growth! In simple truth I would have done substantially better than that (perhaps 4-6% better) if I’d traded at full throttle from day 1, but in fact I scaled in over the first 3 months or so, starting at less than half size trades, and that cut my total profits a bit.

The core numbers are quite interesting.

Total trades: 231, with 191 winners and 40 losers. Average per trade profit was a very nice 1.1%. The profit to loss ratio was 1.6. Average trade length overall (in trade days, not calendar days) was 10.8 (quite quick for a positional system). These are excellent overall results for a serious continuous trading system.

Here’s the “by month” equity graph:

Results Graph Year 1 (Jun-Jun 12-13)

January 23 2013 Update

As it has turned out, my expectation of a strong winter rally starting around Thanksgiving time has been fulfilled…and then some! December was very good for my Spec-K trading, and January is and continues to be out of sight, with profitable exits on trades almost every day! Extending back to late December, I’ve got a strong of 17 straight profitable trade exits without a loss running. I’m up about 20% overall in my current Spec-K trading account that I began trading at the end of May, which is roughly 33% on an annualized basis. I’ll try to get some new specific and recent example trades posted soon.

Looking back, the market has generally been strong over the last 8 months, but there have been some very sharp pullbacks. Despite that, I’ve not suffered a single losing month over this period!

November 23 2012 Update

Entering early October my Spec-K trading account had run off a set of 31 straight winning trades! In the last six week the market has pulled back roughly 6%. I managed a slightly profitable October, and to date in November am slightly profitable, on a closed trade basis. I am expecting a traditional winter rally to start “now” (Thanksgiving period), and will actively trade through the winter expecting reasonable profits if the market shows sideways or upward directional motion.

September 24 2012 Update

September continues to be hot for Spec-K trading. I’ve had 20 straight Spec-K winning trades exit in September, it has been incredible, and we’ve got four more trading days left. Here are a few of the most recently completed trades, starting with ISRG. The first graph shows the longer term set-up with a nice pull back to a major trend line, and the second shows the detail of the trade, in this case entered end of day on a large up move off that trend line. A profitable exit was achieved only two trading days later.

ISRG One Year Chart Showing Set-Up

Here’s BIP, an exceptional quality stock for Spec-K trading as the first (longer term) chart demonstrates. The second chart shows my two trade day 3% profit Spec-K trade on it.

September 14 2012 Update

September has been incredible for Spec-K winners! Here are six just from the last two days alone. First up is BAP, demonstrating the importance of being patient through a long term downdraft, in this case one that initiated the moment I entered the trade. First is the longer term chart showing the setup when I entered, then a close up of the trade itself.

Here’s the opposite extreme, a intra-day (one trade day) winner on CATM that occurred on September 13. Usually I don’t put in a limit sell the day of my buy but this day I did when I noticed price moving up, and it worked out well:

Here are four more typical Spec-K trades, all of which exited on Friday September 14 for a profit:

September 7 2012 Update

I’ve been clocking winners in these bouncy market conditions (though it appears the bull may be roaring again with the strong up day on 9/6). Here’s my trade on MDP, a seven trade day 3% winner:

MDP Spec-K Trade

August 21 2012 Update

I’ve been getting a stream of winners, with three today (8/21/12) as price reversed at what appears to be big double tops in the major indices. Here’s my trade on UNH, first a two year graph showing the exceptional set up where price pulled all the way back to the primary trend line, then a detailed chart showing the trade:

UNH Two Year Showing Pullback to Primary Trendline

A massive double top has formed in the DJIA and SP500, and today’s bar marking the top appears as a classic key reversal (and on the inverse index funds the bottom formed a Larry Williams “oops” day, opening below the recent lows after many daily bars of downtrend, dropped, turned around and closed up, above the prior lows, a frequent trend change signal). All signs are that the market is shifting to a downtrend here. There are divergences galore in indicators (higher prices but lower indicator vs. highs from weeks ago). The market is over bought, short term cycle lows are due over the next few weeks, and it’s about time for an intermediate term cycle high. Lastly, this run up in the last few weeks has been on very low volume, so just about everything is indicating a trend change.

I’ve taken a very large insurance bet as of today as this key reversal formed, using TZA. TZA is an inverse 3x leveraged fund tracking small cap stocks (similar to the Russell 2000). By using a leveraged fund I don’t increase my risk, because I scale my size appropriately for the amount of risk I want to take. TZA has a volatility of 4.7%. If this was one of my ten Spec-K trades I’d put on 50% of a normal trade size. However, this is an insurance trade, and I have very strong views that the market will be moving downward soon if not immediately. So I’ve sized the trade at 12% of my account. With the high volatility is more like a 25% trade (but conserves cash allocation) relative to the nominal 10% of funds Spec-K trade. There is a likely move here of us to 2 points or more for a 12% gain, which in turn would jump my trading account ooverall by almost 1.5%. Here’s to a down day on 8/22 and for a few days thereafter!

Here’s how the insurance trade went. I exited a bit more aggressively than planned when I sensed that the market didn’t have the gas to go up as far as I wanted. So I “only” took a 4.7% profit which netted me about $1500 in profit one a $32,000 trade.

TZA Insurance trade result

Early August 2012 Trade Examples

Here are a few recent trades I’ve executed using Spec-K methods. I’ll keep updating this on a regular basis, so check back regularly for new examples.

Spec-K Trade on AVD July-Aug 2012

Spec-K PCYC Trade August 2012

Spec-K CNQR Trade August 2012

Here’s a recent loser. This occurred after I traded SBUX successfully several times, trading the ranging price action off the support line drawn in. The immediate break of this support line after the buy shown here should have rung a huge warning bell and ideally I’d have taken an insurance sell immediately.

Here’s an excellent example of buying as price approaches both the major longer term trend line, and a shorter term supporting trend line. In this case, I did not want to wait for price to demonstrate a trend change back to “up”, so I entered as price came down to the higher of these two trend lines. TTC long term has an exceptionally consistently long term trend structure, so I was pretty confident in this trade, and that an upward pop in price would be coming shortly. Ka-ching!.

Spec-K Trade on TTC

Here’s an real and current example of a stop run and how, by not having an active stop sell in the market, I avoided what could have been a horrific loss. With this kind of action (see the most recent price bar, on the far right), a stop sell at the proper location would probably have been executed by the market maker (which for this stock is a computer program) towards or even at the bottom of this price bar, giving me a whopping 28% loss! By not having a stop sell in the market, I avoided this debacle, and only became aware of this price action after price had recovered to a point above the opening price. My overall trade is shown, and I walk away from it feeling like I “made” money, relative to both what the trading system result should have been, and what the worst case scenario almost gave me. Note that under no circumstances would I hold this longer under the thought “it might recover from here”. It might, but after this kind of action, I have zero confidence in this stock. I try to live by the rule “if I should have been stopped out…get out!”.

Avoiding a DLTR stop run